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Gauging the ROI of a College Degree

Posted in Department of Education, Higher Education News, Higher Education Policy, Law Schools, News from the Hill, Uncategorized

David P. Lewis

An article in The Wall Street Journal today (subscription required) reports that Senators Ron Wyden (D. Ore.) and Marco Rubio (R., Fla.) are expected to introduce legislation later this week that would require each state to make available information on the average salaries of college graduates who attended institutions in that state.  The information would be provided by institution and major, with the goal of enabling prospective students to “compare salaries by college and major to assess the best return on their investment.”

This is a welcome development that parallels the pressure on law schools for greater transparency regarding the employment outcomes of their students (as we have written about previously – see herehere, here, and here).  As the father of a child going through the college process now, I am very focused, among other things, on what graduates of particular programs in particular target schools do after they graduate, and can attest to the statement in the article that prospective students are “awash with information about costs” but have almost no way “to tell what graduates at specific schools earn – or how many found jobs in their chosen field.”  While the actual bill has not yet been introduced (we will provide the text when available), I note a few key takeaways from the article:

  • The reporting burden is placed on the states.  While there is certainly a “gainful employment” genesis to this bill, the focus seems to be on requiring states to provide the information from wage data submitted by employers and graduate data submitted by colleges, tied together by Social Security numbers.  Thus, the reporting burden on already taxed schools would be modest.
  • The data would be gathered with respect to all colleges, without regard to whether they are for-profit or non-profit.  This is something the proprietary sector has been seeking – a chance to be compared to their traditional school competitors on an apples-to-apples, student outcomes basis.  And the results could be interesting.  As the article notes about Virginia, a state that has already started to provide this type of information:

Among graduates who live in Virginia, the highest starting wages for a bachelor’s degree were $56,400 for graduates of Jefferson College of Health Sciences, a Roanoke school that largely turns out nursing graduates.

That was 42% higher than the University of Virginia’s average of $39,648.  Overall, students with associate’s degrees in technical fields, such as health care, earned more than recipients of bachelor’s degrees.  A spokesman for the University of Virginia declined to comment.

  • There is bipartisan support.  According to Sen. Wyden, support for a bill like this is “unusally broad,” and includes the support of House Majority Leader Eric Cantor (R., Va.), who intends to support a companion bill in the House.
  • Outcomes will be a focus in the next few years.  According to a Department of Education spokeswoman, “[p]roviding more information about outcomes will be a priority during President Barack Obama’s second term,” including completing development on a “College Scorecard” that would provide salary information and average debt load information to to existing data on costs, graduates rates and loan repayment rates.

We will report back once the bill language is released.



Court Dismisses Lawsuit Against NY Law School

Posted in Department of Education, Higher Education News, Higher Education Policy, Law Schools, Misrepresentation

Dennis Cariello
On March 26, the New York Supreme Court (the state’s trial level court) granted the motion to dismiss filed by New York Law School in Gomez-Jiminez v. NY Law School. While we hope to have more commentary soon, I think it fair to say that this decision will make the other cases more challenging to maintain.  While the court rejected an argument based on compliance with the American Bar Association’s standards for reporting of job placement figures (largely based on the wording of the relevant NY statute), it did find that:

plaintiffs could not have reasonably relied on NYLS’s alleged misrepresentations, as alleged in their fraud and negligent misrepresentation claims, because they had ample information from additional sources and thus the opportunity to discover the then-existing employment prospects at each stage of their legal education through the exercise of reasonable due diligence; and

plaintiffs’ theory of damages, that is, an award of the difference between what they paid for their law degree and an amount representing its ostensibly lesser intrinsic worth because the degree has not sufficed as an entrance ticket for the type of jobs plaintiffs hoped to obtain, is entirely too speculative and remote to be quantified as a remedy under the law. This is especially true here since there has been a supervening event, the 2008 Great Recession and its aftermath, which has wreaked havoc throughout the legal job market and upset the plans of most recent law graduates wherever they have attended law school.

Given that those criticisms are likely applicable to all of the law school misrepresentation cases — absent actual fraud and concealment of the true job placement numbers — this may well make these cases incredibly difficult to maintain.

Lawsuits Filed Against Twelve Law Schools

Posted in Higher Education News, Law Schools, Misrepresentation

Dennis Cariello

Earlier today, numerous law firms filed lawsuits against twelve law schools. This is an extension of the suits started last year against three other law schools.

While this will develop — and we are waiting for decisions on fully briefed motions to dismiss in the earlier suits — there is a tough road for the plaintiffs. Assuming these schools published job placement rates in accordance with their respective accreditors’ standards, one has to wonder about the merit of the suits. Accreditors and the Department of Education have an interest in ensuring that statistics are consistent among similar schools so students can make apples-to-apples comparison. This is reflected in the new gainful employment regulations that require schools to follow job placement disclosure requirements of their accreditors. While there is a distinction to be drawn from actual fraud – i.e., just making up the numbers – to the extent law schools followed the accreditors’ standards would seem to be a significant challenge to plaintiffs’ cases. Given the prospect that these firms will be filing law suits against many more law schools — their stated goal is to file 20-25 more suits against law schools every few months — and this is exposed as a sanctioned industry practice, this may become an even bigger challenge for the plaintiffs.